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Is the Sequester Working?

The sequester, the widely reviled law requiring indiscriminate spending cuts starting in January, may actually be working as intended: As a spur to action.

The prospect of big cuts to the favored programs of each party has brought together several bipartisan groups of lawmakers trying to hammer out an alternative. And those alternatives may include the one thing that prevented the “super-committee” from reaching a similar agreement last year: new tax revenues.

Earlier this week, three Democrats and three Republicans on the Senate Armed Services Committee wrote a letter urging the Senate to consider a “balanced bipartisan deficit reduction package” to replace the $100 billion per year cut that begins on New Year’s Day. “Balanced,” of course, is Washington’s euphemism for a plan that includes both spending cuts and revenue increases, unlike the various replacement plans passed by the House that consist entirely of cuts. “All ideas should be put on the table and considered,” said the letter, using a phrase considered heretical to a Republican core beholden to no-tax pledges.
At least two other groups are trying to come up with similar compromises.

Republicans know that if President Obama wins re-election, the tax cut for the rich will probably expire, so they are already talking about using that revenue increase to their advantage in reducing the half of the sequester that they fear the most, $50 billion from the Pentagon.

“We’re not going to save our defense unless we go along with the president’s wishes to raise taxes on small business,” Senator Jim DeMint of South Carolina told the Washington Post. “There are enough Republicans, I think, who are so afraid of defense cuts that they would probably give in.” (He added that he personally would never support tax increases.)

Senator Bob Corker, Republican of Tennessee, told the Post that if Democrats are willing to consider Medicare reforms, Republicans would be “far more open to looking at revenues.”

The sequester law was always intended largely as a goad for serious negotiation about a balanced plan. During last year’s “grand bargain” talks, Democrats, including President Obama, put some painful spending cuts on the table, but the Republicans still would not budge on taxes. Now, unlike last year, the defense cuts are imminent.

For opportunistic Republicans like Mitt Romney, that creates a wedge issue which can be used to discredit the president, and Paul Ryan even suggested in Lima, Ohio, yesterday that the cuts show a national weakness that Muslim protesters and other national adversaries are trying to exploit. For more reasonable Republicans, however, it may create an opportunity for actual compromise.